A mentor’s tips for start-up success
Experienced mentor Andy Chew on how to give your business the best possible chance – and what to expect from a mentor
Many start-ups fail due to a lack of experience or support. So, what should entrepreneurs do, to make sure their business is one of those that makes it through?
As Virgin’s billionaire founder, Sir Richard Branson, recently outlined, the secret to a successful start-up lies in “the art of delegation, risk-taking and surrounding yourself with a great team, working on projects you really believe in”.
For many start-up owners, it could also lie in understanding how and where to focus their efforts.
Be clear on your value proposition:
Differentiation and a strong value proposition are key. You need to be clear on what it is they are offering to a business or consumer.
As a mentor for Cisco’s British Innovation Gateway (BIG) awards, I spend a lot of time working with start-up companies to identify their differentiating factor, in a bid to facilitate long term success. Without a “unique” component, companies will struggle to secure long standing commitment from investors, and will be left with a very short-term vision for the business.
Snap Fashion, winner of last year’s BIG awards, is a case in point. The technology company enables users to find and buy their perfect outfit by uploading a photo to the website and searching for similar items.
Based on a unique visual search engine, it goes beyond simply another e-commerce initiative, to an exciting business model – offering investors a clear value proposition in what is a very competitive market.
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Have a clear, concise pitch:
Getting the right investment and investors for a new business can be arduous. While relationship building undoubtedly has a part to play, the pitching process still holds a lot of sway.
Clarity is key to ensuring the idea is both simple for investors to understand and buy into. In my experience you’ve got five minutes to make an impression – a good mentor should act as sounding board for both new business and fund-raising pitches.
Too often businesses place too much emphasis on asking for money, rather than demonstrating what it is that they are going to do with it.
At a time when investors are seeing slower returns on their investments, entrepreneurs need to be able to clearly identify key milestones for the business – such as strengthening management, winning awards or accreditation and securing a sufficiently impressive client – in a bid to outline ROI expectations and deliverables.
Prioritise your time and focus:
The big deal will often appear to be just around the corner. However, misplaced bets – in terms of time and focus as well as cash – can be extremely costly.
For example, trying to engage with large corporates – either selling to them or partnering with them – needs careful evaluation and thought. Six month sales cycles are not uncommon and reorganisation happens constantly.
What looks like a hot opportunity today can very easily wither on the vine as priorities change. Many of the decisions that are made in the early stages of a business’ development have consequences on its long term future, so prioritising where entrepreneurs are going to focus their efforts, and the amount of time spent on it, is absolutely key.
While entrepreneurs want and need to have acute antenna to the landscape of possibilities, it also pays to sometimes take a step back and consider the opportunity cost involved. Time management and prioritisation are absolutely essential for any business owner to get their company off the ground, and an area where business mentors can really add value.
Entrepreneurs need to constantly be asking themselves ‘Where does this fit against a critical path of things that have to get done?’ ‘Is it essential or nice to have?’ and ‘How big a bet does it represent?’ Only then will they stand a real chance of prioritising effectively for business growth.
Manage mentoring expectations upfront:
A solid mentor can help provide impartial unbiased advice and support. As a mentor myself, I understand how important it is to clarify how that role is defined within the business.
It’s as much about understanding what the business expects to get out of the partnership, as it is about recognising what the mentor can provide.
While the mentor’s role is typically to generate networking opportunities, foster business relationships, and offer technical advice, this can differ from business to business and lines can become blurred.
As an external employee, mentors are not privy to financial discussions in the same way that a stakeholder or board member might be, so entrepreneurs need to be able to distinguish between the mentor’s ability to offer managerial or strategic guidance from financial, legal or other paid for professional services.
Ensuring both parties clearly understand targets and their expectations of each other is vital to make the most of the partnership.
There are many variables and unknowns for start-ups to deal with. Having the right kind of mentoring relationships in place can be invaluable in thinking through how to manage and exploit these.
Mentors are in this to help! But understanding upfront what a mentor can and can’t reasonably be expected to provide, is a great starting point.
Andy Chew is managing director, architectures, for Cisco across the UK & Ireland and a mentor for Cisco’s British Innovation Gateway awards programme. www.thebigawards.co.uk